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New Year, New Challenges, New Services!

Consumer Loan Quality Control Reviews

  • Personal Loans (unsecured and secured)
  • Auto Loans
  • Solar Winds
  • Construction Loans

You provide us your guidelines for each review, and we will customize our reviews to meet your audit scope. 

VA SAR Reviews

  • Desk Review of Property Appraisal-Collateral
  • Review of SAR Documents
  • Validation the SAR complied with all regulations and timeliness guidelines
  • Validate the VA Underwriter/Staff Appraisal reviewer completed the approval Documents per guidelines.

Home Equity Underwriting

  • A customizable mortgage underwriting solution
  • Underwrite to your lender guidelines and investor requirements
  • Over 15 years of experience underwriting loans

**We do not accept Texas Home Equity loans.

Want to learn more? Contact our sales team for more information at sales@stonehillgroup.com.

StoneHill Acquisition Completed

The StoneHill Group (TSG) is pleased to share that our equity acquisition by Sourcepoint, announced in early November 2021, closed on Friday, December 24, 2021, having received all regulatory approval.

This combination will help us to continue to grow and deliver best-in-class results for our clients while simultaneously opening new services under an existing master services agreement.  Sourcepoint, headquartered in Palm Bay, Florida, is one of the nation’s leading providers of outsourced mortgage services and solutions. With the addition of Stonehill’s expertise in Quality Control, Due Diligence and Fulfillment we strengthen our position as the premier provider of Originations, Servicing, Capital Markets, Title & Post-Closing services in the US mortgage market.

Please feel free to contact me, or your primary TSG contact, with any questions.

Kind Regards,

 

Patrick Gluesing

EVP, Head of StoneHill

Important Announcement About StoneHill’s Continued Evolution

Atlanta, GA – November 10, 2021

We are pleased to share some exciting news about our growth and evolution that was announced today.   Sourcepoint, a Firstsource company, has signed a definitive agreement to acquire our company and we anticipate the transaction to be closed by the end of 2021, subject to customary regulatory approval.

Inherent in this decision, TSG has been focused upon the benefits that this strategic transaction will offer to our clients and employees. Sourcepoint, headquartered in Palm Bay, Florida, is one of the nation’s leading providers of outsourced mortgage services and solutions.  Stonehill’s expertise in Quality Control, Due Diligence and Fulfillment are a great complementary fit for Sourcepoint and strengthen its position as the premier provider of Originations, Servicing, Title & Post-Closing services in the US mortgage market.  This combination will help us to continue to grow and deliver best-in-class results for our clients while simultaneously opening new services under an existing master services agreement.

Sourcepoint parent, Firstsource, is a rapidly growing organization with over 27,000 employees across the US, UK, India, and the Philippines. It serves industry leaders in Financial Services, Healthcare, and Communications, Media & Technology industries.

TSG’s entire management team, our current organizational structure and our operational, client services and sales contacts will remain the same.

During this transition, TSG is committed to providing the same high level of service that our clients have come to expect.

Please feel free to reach out to your primary TSG contact with any questions you may have regarding this announcement.

Kind Regards,

 

David Green                                      Patrick Gluesing

Chairman &CEO                                President & COO

New IRS Requirements Regarding Form 4506-C

New IRS Requirements Regarding Form 4506-C

The IRS has announced some important changes to how they accept 4506-C forms based upon their move from a manual process to an automated process through Optical Character Recognition (OCR) software.

They anticipate this will significantly improve their efficiency; however, this might dramatically impact your internal process of collecting 4506C’s from borrowers.

The IRS implemented this new automated process October 1, 2021, however, it will not be required until January 1, 2022. 

1. Must be a CLEAN typed copy of the 4506-C form.
a. Handwriting is unacceptable, except for the Signature and/or Sign Date and/or Title.
b. The form cannot be a combo of handwritten and typed.
c. No cell phone pictures of the form.
d. No reduced size of the form.

2. One person per form. (If NOT filling joint returns)
a. If borrowers did NOT file joint tax returns, you must have a 4506-C for each borrower.
b. List primary taxpayer on Line 1.

3. One Product per form per person.
a. Only 1 box can be checked per each product per each person.
b. Multiple boxes cannot be checked on the 4506-C.

4. The years being requested must be listed on Line 8.
a. No additional years should be listed on Line 8.

Social Security Administration SSA-89 Form Change

The Social Security Administration (SSA) has released an updated version of their Form SSA-89 as of 12/2020.

Please begin using the new version as soon as possible. You have until September 30, 2021, to transition to the updated form.

You can access a copy of the new version by following the links below:

Form SSA-89 (12-2020)

2021 MERS® QA Deliverables – Are you Prepared?

2021 MERS® QA Requirement submission process is now open and in full swing.  Is your organization prepared?

Use the eQARequirements Landing Page on the MERS® Member Website to determine if your organization has one or more QA deliverables due by the MERS December 31, 2021 deadline.

  • MERS® System QA Plan?
  • MERS® eRegistry QA Plan?
  • Annual Report?

Be in the know! MERS has revised the Annual Report Review criteria for the 2021 review cycle.  Changes to the review include:

  • Member Information and MERS System Security
  • MERS System Transactions accuracy and timeliness
  • MERS Documents General and State specific requirements
  • Third-party reviewer must successfully complete the MERS Annual Report Reviewer Training

Not sure where to begin? Here at The StoneHill Group, we work with you every step of the way.  We have successfully aced the Annual Report Reviewer Training and are prepared to assist you.  No need for last minute deadline stress.  Now is the time to get started!

Have other MERS QA requirement needs?  In addition to the MERS Annual Report Review, our MERS Services include MERS System Quarterly/Monthly Data Reconciliations and now offering MERS eRegistry System Data Reconciliations as required for eRegistry System Participants.  Our data reconciliations include side by side field comparison for all required and conditionally required fields as outlined by MERS and identify MINs that are listed in one system yet not the other to assist in a complete reconciliation process.

The StoneHill Group for your MERS QA Requirement needs:

  • Annual Report Reviews
  • MERS System Data Reconciliations
  • MERS eRegistry System Data Reconciliations – New service for eRegistry Participants!

Are you not currently a Stonehill partner? Are you trying to do this on your own? No problem, let us help! To become a partner of Stonehill and take advantage of all the great services we have to offer or for more information please contact sales@stonehillgroup.com. While your here check out our other services as well. We look forward to working with you.

Important Agency Updates Regarding New Field Review Requirements

Fannie Mae has updated their field review policy “to better align QC processes with available collateral data and industry-leading collateral tools. The combination of standardized data and Collateral Underwriter® allows for a more robust QC process, which reduces or eliminates the need for a field review in most circumstances.” Therefore, the new policy replaces the current appraisal QC requirements with a new collateral risk assessment (CRA) for all loans selected for a QC review in the random sample. To comply with Fannie Mae’s requirements, a CRA will need to be completed on 100% of Fannie Mae loans selected for QC that do not have a Property Inspection Waiver.

Freddie Mac mortgages selected for post-closing quality control reviews, the Seller must ensure the appraisal, or if applicable, other property valuation, meets Freddie Mac requirements. The process is expected to utilize desk reviews, field reviews, automated valuation models, multiple listing service data, public records data, online tools and/or other appropriate methods to validate and ensure the quality of origination information.  For Mortgages originated with appraisals, the Seller must obtain a desk review of the appraisal report to ensure that it accurately reflects the market value, condition, and marketability of the subject property and that the Mortgaged Premises is adequate collateral for the Mortgage. To comply with Freddie Mac’s requirements, a standard desk review will need to be completed on all Freddie Mac loans selected for QC.

FHA, VA, & USDA

There have been no changes to their field review guidelines. Field reviews on these loan types are still required per their guidelines.

If you are currently a Stonehill QC Client, a communication regarding the above changes was sent out on July 15, 2021. If you did not receive this communication or have any questions, please feel free to reach out to Donna Rowe, your Client Services Manager, at drowe@stonehillgroup.com.

Freddie Mac Updates to Re-Verification Field Review Requirements

As part of the Freddie Mac Seller’s quality control program, for Mortgages selected for post-closing quality control reviews, the Seller must ensure the appraisal, or if applicable, other property valuation, meets Freddie Mac requirements. The process is expected to utilize desk reviews, field reviews, automated valuation models, multiple listing service data, public records data, online tools and/or other appropriate methods in order to validate and ensure the quality of origination information.

For Mortgages originated with appraisals, except as described below, the Seller must obtain a desk review of the appraisal report to ensure that it accurately reflects the market value, condition, and marketability of the subject property and that the Mortgaged Premises is adequate collateral for the Mortgage.

If it is determined that the characteristics of the property or the scope of the desk review is insufficient to determine the accuracy of the appraisal or the adequacy of the collateral, a field review performed by an appraiser unaffiliated with the origination appraiser or appraisal firm is required:

Note: The Seller does not need to obtain a field review during the quality control review if one was obtained during the origination process and adequately supported the eligibility of the Mortgage for sale to Freddie Mac.

For more detailed information we recommend that you review the Freddie Mac Selling Guide, Section 3402.5 (E)(i)(A)(B), as well as review with your legal department, if applicable.

 

New Origination and Servicing Agency Updates to COVID-19 as of March 31, 2021

The StoneHill Group continually monitors the mortgage industry for changes that impact our clients. Here are the most recent Stonehill and Agency updates.

Stonehill Updates Related to COVID-19

In 2020 the Stonehill Group (TSG) temporarily started placing a comment on loans where required post-closing tax transcripts were missing, due to the IRS delays around processing the tax transcript orders. Now that the IRS delays have subsided, TSG has returned to placing findings regarding tax transcripts on audits starting 04/01/2021.

Origination Agency Updates Related to COVID-19

March 31, 2021

Fannie Mae

Fannie Mae Updates LL-2021-03: Impact of COVID-19 on Originations

Updates Lender Letter (LL-2021-03) to extend the application dates for verbal verifications of employment and power of attorney flexibilities to Apr. 30, 2021. This will be the final extension for these policies. Applications dated May 1, 2021 and later will be subject to standard Selling Guide policies.

Effective: These temporary flexibilities became effective on Mar. 23, 2020 for all loans in process and are effective for loans with application dates on or before Apr. 30, 2021.

Many lenders are reporting difficulty in obtaining the verbal verification of employment (VOE) due to disruption to operations of the borrower’s employer. We expect lenders to attempt to obtain the verbal VOE in accordance with our existing requirements guidance. However, we will allow the following flexibilities: 

Written VOE: The Selling Guide permits the lender to obtain a written VOE confirming the borrower’s current employment status within the same timeframe as the verbal VOE requirements. An email directly from the employer’s work email address that identifies the name and title of the verifier and the borrower’s name and current employment status may be used in lieu of a verbal VOE. In addition, the lender may obtain the VOE after loan closing, up to the time of loan delivery (though we strongly encourage getting the verbal VOE before the note date). 

Paystub: The lender may obtain a year-to-date paystub from the pay period that immediately precedes the note date. 

Bank statements: The lender can provide bank statements (or other alternative documentation as permitted by B3-4.2-01, Verification of Deposits and Assets) evidencing the payroll deposit from the pay period that immediately precedes the note date.

Requirements for borrowers using self-employment income to qualify

Effective: These policies became effective for loans with application dates on or after Jun. 11, 2020. The updated requirements to obtain three business depository account statements (increased from two statements) with an unaudited profit and loss statement and to review the depository account statements to support the level of business revenue reported in the current YTD profit and loss statement were effective for loan applications dated on and after Dec. 14, 2020. All policies are effective until further notice.

Income Analysis

Self-employment income is variable in nature and generally subject to changing market and economic conditions. Whether a business is impacted by an adverse event, such as COVID-19, and the extent to which business earnings are impacted can depend on the nature of the business or the demand for products or services offered by the business. Income from a business that has been negatively impacted by changing conditions is not necessarily ineligible for use in qualifying the borrower. However, the lender is required to determine if the borrower’s income is stable and has a reasonable expectation of continuance.

Due to the pandemic’s continuing impact on businesses throughout the country, lenders are now required to obtain the following additional documentation to support the decision that the self-employment income meets our requirements:

  • an audited year-to-date profit and loss statement reporting business revenue, expenses, and net income up to and including the most recent month preceding the loan application date; or
  • an unaudited year-to-date profit and loss statement signed by the borrower reporting business revenue, expenses, and net income up to and including the most recent month preceding the loan application date, and three business depository account(s) statements no older than the latest three months represented on the year-to-date profit and loss statement.
  • For example, the business depository account statements can be no older than Aug, Sep, Oct. for a year-to-date profit and loss statement dated through Oct. 31.
  • The lender must review the three most recent depository account statements to support the level of business revenue reported in the current year-to-date profit and loss statement. Otherwise, the lender must obtain additional statements or other documentation to support the on-going nature of business revenue reported in the current year-to-date profit and loss statement.

 

NOTE: The year-to-date profit and loss statement must be no older than 60 days old as of the note date consistent with current Age of Documentation requirements.

Lenders must review the profit and loss statement, and business depository accounts if required, and other relevant factors to determine the extent to which a business has been impacted by COVID-19. The lender can use the following guidance when performing the assessment of business operations and stability and must complete the business income assessment based on the minimum additional documentation above.

Business Income Calculation Adjustment

When the lender determines current year net business income has been impacted by the COVID-19 pandemic and is

  • less than the historical monthly income calculated using Form 1084, but is stable at its current level, the lender must reduce the amount of qualifying income calculated using Form 1084 to no more than the current level of stable income as determined by the lender.
  • more than the historical income calculated using Form 1084, the lender must use no more than the currently stable level of income calculated using Form 1084 to qualify the borrower.

In all cases, qualifying income must be supported by documentation, including any supplemental documentation obtained by the lender.

Business Assets

We are clarifying that proceeds from the Small Business Administration PPP or any other similar COVID-19 related loans or grants are not considered business assets. Refer to B3-4.2-02, Depository Accounts for details.

Verification of self-employment

Effective: These policies became effective for loans with application dates on or after Apr. 14, 2020 and are effective until further notice.

When a borrower is using self-employment income to qualify, the lender must verify the existence of the borrower’s business within 120 calendar days prior to the note date. Due to latency in system updates or recertifications using annual licenses, certifications, or government systems of record, lenders must take additional steps to confirm that the borrower’s business is open and operating. The lender must confirm this within 20 business days of the note date (or after closing but prior to delivery).

Below are examples of methods the lender may use to confirm the borrower’s business is currently operating:

  • evidence of current work (executed contracts or signed invoices that indicate the business is operating on the day the lender verifies self-employment);
  • evidence of current business receipts within 20 days of the note date (payment for services performed);
  • lender certification the business is open and operating (lender confirmed through a phone call or other means); or
  • business website demonstrating activity supporting current business operations (timely appointments for estimates or service can be scheduled).

See B3-3.1-07, Verbal Verification of Employment for our existing requirements.

Fannie Mae Updates LL-2021-04: Impact of COVID-19 on Appraisals

Temporary appraisal requirement flexibilities

On Mar. 23, 2020 we began allowing temporary flexibilities to our appraisal inspection and reporting requirements. As described below, we will accept an alternative to the traditional appraisal required under Selling Guide Chapter B4-1, Appraisal Requirements, when an interior inspection is not feasible because of COVID-19 concerns. We will allow either a desktop appraisal or an exterior-only inspection appraisal in lieu of the interior and exterior inspection appraisal (i.e., traditional appraisal).

If a traditional appraisal is not obtained and there is insufficient information about the property for an appraiser to be able to complete an appraisal assignment with a desktop or exterior-only inspection appraisal, the loan will not be eligible for delivery to us. 

Use of lender variances and temporary appraisal flexibilities.

The appraisal flexibilities announced in this Lender Letter may be combined with existing lender variances unless Fannie Mae notifies the lender that it may not combine negotiated terms with these flexibilities.

Regardless of specific lender variances, only Fannie Mae-owned, limited cash-out refinance transactions being sold to Fannie Mae and purchase transactions are eligible for the appraisal flexibility. 

Desktop appraisals

For purchase money transactions when an interior and exterior appraisal is not available, lenders are encouraged to obtain a desktop appraisal rather than an exterior-only appraisal.

The minimum scope of work for a desktop appraisal does not include an inspection of the subject property or comparable sales. The appraiser relies on public records, multiple listing service (MLS) information, and other third-party data sources to identify the property characteristics.

When a desktop appraisal is performed, reported on Form 1004 or Form 1073, and submitted to us through the Uniform Collateral Data Portal® (UCDP®), the appraisal will be scored by Collateral Underwriter® (CU® All loans with a CU risk score of 2.5 or less will receive value representation and warranty relief under Day 1 Certainty®. With desktop appraisals, lenders will have the added risk management and efficiency benefit of being able to use CU to aid in the appraisal review process.

As described below, Freddie Mac and Fannie Mae have worked together to develop documents that include modified appraisal report language for the scope of work, statement of assumptions and limiting conditions, and certifications that must be used with these appraisal forms.

Exhibits for desktop appraisals

Each desktop appraisal report must include the following exhibits:

  • a location map indicating the location of the subject and comparables, and
  • photographs of the subject property. We recognize that it may be challenging in some instances to obtain photographs; however, it is expected that the appraiser utilizes all available means to obtain relevant pictures of the subject property.

Exterior-only inspection appraisals

An exterior-only inspection appraisal may be obtained in lieu of an interior and exterior inspection appraisal for the following transactions:

  • purchase money loans
  • limited cash-out refinances where the loan being refinanced is owned by Fannie Mae

Lenders will not receive value representation and warranty relief under Day 1 Certainty® for loans with exterior-only appraisals.

Completion reports (Form 1004D)

We require the Appraisal Update and/or Completion Report (Form 1004D) to evidence completion when the appraisal report has been completed “subject to.” For all loans for which a completion certification is not available due to issues related to COVID-19, (excluding HomeStyle Renovation loans), we will permit a letter signed by the borrower confirming that the work was completed. Lenders must also provide further evidence of completion, which may include photographs of the completed work, paid invoices indicating completion, occupancy permits, or other substantially similar documentation. All completion documentation must be retained in the loan file.

Virtual inspections for appraisals and renovation loans Updated Mar. 11

Beginning Apr. 14, 2020, appraisers may use virtual inspection methods to augment the data and imagery that is used for either a desktop appraisal or an exterior-only appraisal. All traditional appraisals require the appraiser to perform a complete onsite interior and exterior inspection of the property. A virtual inspection cannot be used as a substitute for the onsite interior and exterior inspection for a traditional appraisal. Additionally, an onsite interior and exterior inspection is required for the Appraisal Update and/or Completion Report (Form 1004D) used to confirm completion of renovation for HomeStyle Renovation loans.

Note: Virtual inspections using video and photographs provided by the borrower or contractor can be used to evidence renovation progress to disburse additional renovation funds can be used only for loans with application dates on or before Apr. 30, 2021.

Flexibilities for condominium project review Updated Mar. 11

Effective: Beginning Apr. 14, 2020, we offered additional guidance and temporary flexibilities for project eligibility reviews on condo projects. This flexibility is effective for loans with application dates on or before Apr. 30, 2021. Applications dated May 1, 2021 or later will be subject to our standard Selling Guide policies.

Waiver of project review

We are extending project review waiver flexibilities for loans with LTV ratios greater than 80% and up to 90%. This flexibility applies to Fannie Mae-owned, limited cash-out refinance transactions for owner-occupied condo units only. Second homes and investment transactions are excluded. When applying this flexibility, lenders must confirm the project meets the following, existing requirements:

  • the litigation requirements described in Selling Guide B4-2.1-03, Ineligible Projects, and
  • all policies in Selling Guide B4-2.1-02, Waiver of Project Review, for all loans with LTV ratios greater than 80% using the waiver of review for Fannie Mae-owned limited cash-out refinance transactions.

Lenders must provide Project Type Code V in the loan delivery data file for these transactions. The use of other Project Type Codes may result in fatal edits at loan delivery. 

Freddie Mac

We continue to work closely with Fannie Mae under the guidance and direction of the FHFA to address the impacts of the coronavirus disease (COVID-19) pandemic on Borrowers and the Mortgage origination process.

In Guide Bulletin 2021-7, we extended the effective date for some previously announced temporary flexibilities for Mortgages with Application Received Dates through March 31, 2021.

Temporary extension

We are further extending the effective date for Mortgages with Application Received Dates through April 30, 2021 for the following flexibilities:

Temporary extension with notice of discontinuance

We are extending the effective date for the flexibilities shown in the table below for Mortgages with Application Received Dates through April 30, 2021; Mortgages with Application Received Dates on or after May 1, 2021 must comply with the applicable Guide requirements. This is the final extension of these temporary flexibilities. 

COVID-19 temporary flexibilities
Employed income – 10-day pre-closing verification
Condominium Projects
Power of attorney (POA)

 

COVID-19 FAQ UPDATES

We have updated the COVID-19 Selling FAQs to provide additional guidance. The updated and new FAQs are marked with today’s date for easy reference. 

Servicing Agency Updates Related to COVID-19

March 16, 2021

Freddie Mac

Freddie Mac Announces Guide Bulletin 2021-8 (Temporary Servicing Guidance Related to COVID-19)

EFFECTIVE DATE

All of the changes announced in this Bulletin are effective immediately unless otherwise noted.

COVID-19 FORECLOSURE MORATORIUM

We are extending the foreclosure moratorium last announced in Bulletin 2021-6. Servicers must suspend all foreclosure actions, including foreclosure sales, through June 30, 2021. This includes initiation of any judicial or non-judicial foreclosure process, move for foreclosure judgment or order of sale. This foreclosure suspension does not apply to Mortgages on properties that have been determined to be vacant or abandoned.

COVID-19 FORBEARANCE PLAN

To provide further assistance to Borrowers who enrolled in a COVID-19 forbearance plan prior to March 1, 2021, and who have reached the end of their 12-month term without having resolved their hardship we are extending the allowable term of the COVID-19 forbearance in accordance with the temporary requirements as described. These new requirements apply only to Borrowers who:

  • Have a COVID-19 related hardship; and
  • Are on an active forbearance plan for a COVID-19 hardship as of February 28, 2021.

For further information, please review the Freddie communication in its entirety.

ADDITIONAL RESOURCES

We encourage Servicers to review the following COVID-19 resources:

Freddie Mac Single-Family web page on COVID-19 resources

Freddie Mac Servicing FAQs on COVID-19

New Origination and Servicing Agency Updates to COVID-19 as of February 12, 2021

The StoneHill Group continually monitors the mortgage industry for changes that impact our clients. Here are the most recent Agency updates.

Origination Agency Updates Related to COVID-19

February 12, 2021

Freddie Mac Updates

Freddie Mac Announces Guide Bulletin 2021-7 (Extension of Temporary Flexibilities Related to COVID-19) (02/10/21)

SUBJECT: EXTENSION OF TEMPORARY FLEXIBILITIES RELATED TO COVID-19

Freddie Mac continues to work closely with Fannie Mae under the guidance and direction of the FHFA to address the ongoing economic implications and uncertainty related to the coronavirus disease (COVID-19) pandemic and its impacts on Borrowers and the Mortgage origination process.

In Bulletin 2021-1, we extended the effective date for some previously announced temporary flexibilities for Mortgages with Application Received Dates through February 28, 2021. We are further extending the effective date for Mortgages with Application Received Dates through March 31, 2021 for the following:

Freddie Mac Selling FAQs related to COVID-19 

FHA Updates

FHA Issues Multiple COVID-19 Temporary Policy Waivers

Today, the Federal Housing Administration (FHA) announced several temporary provisions issued through policy waivers to help mitigate the impacts of the COVID-19 pandemic on borrowers with FHA-insured mortgages and mortgagees. These provisions are part of the Biden Administration’s ongoing efforts to provide economic relief in response to the coronavirus pandemic. The following waivers build upon previously issued waivers and will be effective through December 31, 2021:

  • Regulatory and Handbook Waivers: Alternative Methods for Face-to-Face Interviews with Borrowers
  • Temporary Partial Waiver of Mortgagee Letter (ML) 2017-05: Home Equity Conversion Mortgages (HECM) Claim Type 22 (CT-22) Assignment Requests
  • Temporary Partial Waiver of ML 2015-11: Waive $5,000 Cap on Property Charge Repayment Plan. 

Temporary Regulatory and Handbook Waivers: Alternative Methods for

Face-to-Face Interviews with Borrowers

The temporary Regulatory and Handbook waivers allow mortgagees to utilize alternative methods for conducting borrower interviews, which are used to gather and convey information to assess the borrower’s circumstances, and to determine appropriate repayment plans as part of the early default intervention requirements of FHA default servicing. These waivers are effective through December 31, 2021.

Temporary Partial Waiver of ML 2017-05: HECM Claim Type CT-22

Assignment Requests

This temporary partial waiver of ML 2017-05 allows mortgagees to submit a CT-22 Assignment Claim without having to obtain a signature from the HECM borrower on an occupancy certification. Mortgagees must continue to obtain the HECM borrower’s annual certification. This temporary waiver is effective through December 31, 2021.

Temporary Partial Waiver of ML 2015-11: Waive $5,000 Cap on

Property Charge Repayment Plan

This temporary partial waiver of ML 2015-11, allows mortgagees to offer a recalculated repayment plan for unpaid property charges to HECM borrowers regardless of the total outstanding arrearage following a failed repayment plan. This temporary partial waiver is effective through December 31, 2021. 

Servicing Agency Updates Related to COVID-19

February 18, 2021

FHA

FHA INFO #21-09

FHA Extends its Foreclosure and Eviction Moratoria and Expands Temporary COVID-19 Forbearance and Servicing Polices to Provide Additional Homeowner Relief 

Recognizing the financial and other hardships many individuals and families are facing due to the ongoing COVID-19 pandemic, the Federal Housing Administration (FHA) is expanding its relief efforts to assist homeowners with FHA-insured mortgages.

In today’s Mortgagee Letter (ML) 2021-05, Extensions of Single Family Foreclosure and Eviction Moratorium, Start Date of COVID-19 Initial Forbearance, and Home Equity Conversion Mortgage (HECM) Extension Period; Expansion of COVID-19 Loss Mitigation Options, FHA outlines multiple COVID-19 related policy extensions and expansions that are designed make it easier for mortgagees to provide FHA-insured homeowners with the assistance they need to retain their homes during these challenging times.

The updated guidance in this ML is effective immediately and applies to all FHA Title II Single Family programs. The ML:

  • Extends the foreclosure and eviction moratoriums through June 30, 2021 and provides a 180-day extension to the deadlines for the first legal action and the reasonable diligence time frame from the date of the moratorium expiration.
  • Extends the dates to request an initial COVID-19 Forbearance or a COVID-19 Home Equity Conversion Mortgage (HECM) extension period through June 30, 2021.
  • Adds two COVID-19 Forbearance and COVID-19 HECM extension periods of up to three months each for borrowers who requested their initial COVID-19 Forbearance or COVID-19 HECM extension period on or before June 30, 2020, and are coming to the end of their 12-month period;
  • Expands eligibility for the COVID-19 loss mitigation options for certain borrowers regardless of whether they received a COVID-19 Forbearance; and
  • Eliminates the restriction on the number of permanent COVID-19 home retention options a borrower can receive.

For more information, read today’s Mortgagee Letter 2021-05 and Press Release.

Industry Webinar

In the coming days, FHA servicers and other interested parties will be able to access a pre-recorded webinar in which the various policy updates outlined in ML 2021-05 will be discussed in more detail. Viewing information and training materials will be available on the FHA Single Family Events and Training web page.

Webinar access information will be communicated through an FHA INFO when available.

FHA INFO #21-06

FHA Updates Its COVID-19 Forbearance Start Date and Home Equity Conversion Mortgage (HECM) Extension Period

The Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2021-04, Update to the COVID-19 Forbearance Start Date and the COVID-19 Home Equity Conversion Mortgage (HECM) Extension Period today.

Effective immediately, this ML extends through March 31, 2021, the deadline for single family borrowers with FHA-insured mortgages to request an initial COVID-19 forbearance from their mortgage servicer to defer or reduce their mortgage payments for up to six months. If needed, this forbearance can be extended for an additional six months. This ML also extends the deadline to request the initial extension period for HECM borrowers impacted by the COVID-19 pandemic.

The means of communication between a borrower and their mortgage servicer regarding a COVID-19 forbearance, and the terms of the COVID-19 forbearance, remain the same as established in ML 2020-06 and ML 2020-22.

VA 

CIRC. 26-21-04 Approving Forbearance Requests for Veterans Affected by COVID-19 (02/16/21)

Background and Purpose: Veterans who have recently begun experiencing financial hardships due to the pandemic are uncertain about forbearance options available to them. Many Veterans who requested forbearance early on and have or will soon be coming to the end of their forbearance periods, are also uncertain. This Circular provides guidance for granting COVID-19 forbearance to Veterans who continue experiencing financial hardships, directly or indirectly, because of the pandemic.

Action. Under this Circular, VA expects servicers to approve a Veteran’s request for COVID-19 forbearance, or continued forbearance, if a Veteran is experiencing a financial hardship, directly or indirectly, due to COVID- 19, and the hardship negatively affects the Veteran’s ability to make on-time loan payments. Veterans with VA-guaranteed loans may be eligible for COVID-19 forbearance, regardless of the delinquency status of the VA-guaranteed loan. The Veteran’s initial request for COVID-19 forbearance may be granted for up to six months. If needed by the Veteran, the Veteran may request, and VA expects the servicer to approve, additional COVID-19 forbearance for up to six months. Servicers may approve a Veteran’s initial COVID-19 forbearance if the request is made on or before June 30, 2021. A COVID-19 forbearance period may extend through June 30, 2022.

For Veterans who requested their initial COVID-19 forbearance on or before June 30, 2020, VA expects that, if needed, the Veteran may request, and the servicer will approve, up to two additional three-month COVID-19 forbearance periods, after twelve months of COVID-19 forbearance. The Veteran must request each three-month extension individually. Neither of the two additional three-month COVID-19 forbearance periods may extend beyond December 31, 2021.

Any period of COVID-19 forbearance may be shortened at the Veteran’s request.

The servicer should waive all late charges, fees, and penalties, if any, that might otherwise accrue because of payments missed during a COVID-19 forbearance.

The COVID-19 forbearance described in this guidance does not supersede or otherwise eliminate the special forbearance loss mitigation option defined in 38 C.F.R. § 36.4301.

Rescission: This Circular is rescinded July 1, 2022

USDA

USDA Extends Eviction and Foreclosure Moratorium, and Offers Guidance on Mortgage Forbearance Deadline

PURPOSE

The purpose of this notice is to provide relief to and guidance for Single Family Housing Guaranteed Loan Program (SFHGLP) borrowers impacted by the COVID-19 pandemic.

Moratorium on Foreclosures and Evictions

The U.S. Department of Agriculture (USDA) Rural Development is extending its moratorium on foreclosures and evictions through June 30, 2021 for SFHGLP properties. After the moratorium ends, if the lender decides to proceed with foreclosure, the time for initiating or continuing foreclosure proceedings is extended from 90 days (as specified in 7 CFR 3555.307(a)) to 180 days. The moratorium does not apply in cases where the servicer has documented the property is vacant or abandoned.

Forbearance Policy

For borrowers who request an initial forbearance on or before June 30, 2021, lenders are expected to grant payment forbearance based on a borrower’s attestation (verbal or written) to financial hardship caused by the COVID-19 emergency. The initial forbearance period may be up to 180 days and the borrower may request an extension of up to an additional 180 days.

Borrowers who received an initial CARES Act forbearance before June 30, 2020, may be granted up to two additional three-month payment forbearances. The borrower must request each extension individually.

The term of the initial forbearance and any extension may be shortened at the borrower’s request.

Fees, penalties, or interest (beyond the amounts calculated as if the borrower had made all contractual payments in a timely fashion) should not accrue during the forbearance.

Upon completion of the forbearance the lender should communicate with the borrower and determine if they are able to resume making regular contractual payments. If so, the lender may offer the borrower either a written re-payment plan to resolve any amount due or at the borrower’s request, evaluate the borrower for one of the three options outlined in Chapter 18.15 of the Handbook-1-3555.

Questions regarding program policy and this guidance may be directed to the National Office Division at sfhglpServicing@usda.gov or (202) 720-1452.